1
Introduction to Management
Chapter four
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Definition
2
Organizing is the process of identifying and grouping
tasks to be performed, assigning responsibility and
delegating authority and establishing relationships
for the purpose of enabling to work most effectively
together in the accomplishment of objectives.
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Definition (continued)
3
Four distinct Activities:
I. It determines what work activities have to be done
to accomplish organizational objectives.
II. It classifies the type of work needed and groups the
work in to manageable units.
III. It assigns the work to individuals and delegates the
appropriate authority.
IV. It designs a hierarchy of decision-Making Relation-
ships.
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FORMAL AND INFORMAL ORGANIZA-
TION
4
Formal organization is an organization that is deliberately and rationally
designed and approved by management
Informal organization refers to people in group associations, but these as-
sociations are not specified in the structure of the formal organization.
Informal organizations are natural groupings of people in the work situa-
tion based on their behavioral patterns, interests, beliefs, objectives, etc.
They appear in response to the social needs – the need of people to asso-
ciate with others.
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FORMAL AND INFORMAL
ORGANIZATION(continued)
5
Informal organizations have the following characteristics:
Group norms: these are unwritten laws that govern the behavior of mem-
bers of the informal organization.
Group cohesiveness: by this we mean the members of an informal organiza-
tion stick together.
Group leadership: the informal organization has a leader- the informal
leader. This person is the most active one from among the members.
Communication network: the informal; organization has a communication
network that is called grapevine.
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FORMAL AND INFORMAL
ORGANIZATION(continued)
6
Types of Groups in the Informal Organization
[Link] Groups
Include persons whose positions are on the same level of the
organization i.e. they are groups that are formed by peers.
The groups can consist of all the members in the same work
areas or membership developed across departmental lines.
Members may be all management or non-management person-
nel.
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FORMAL AND INFORMAL
ORGANIZATION(continued)
7
[Link] Groups
Include people on different levels of the formal organization’s
hierarchy.
These people always come together within the same depart-
ment (work areas).
A vertical group can consist of a supervisor and one or more
of his/her employees. It may also be formed through skip -
level relationships - a top-level manager may associate with a
first level manager.
Their relationships can be the result of outside interests or
various employment relationships.
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FORMAL AND INFORMAL
ORGANIZATION(continued)
8
Mixed Group
It is a combination of two or more persons whose
positions are on different levels of the formal organi-
zation and in different work areas.
Example:A Vice-President may develop a close rela-
tionship with the director of computer services in
order to get preferential treatment.
Mixed groups often form because of common bonds
outside work.
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FORMAL AND INFORMAL
ORGANIZATION(continued)
9
Why people form informal groups?
Need for satisfaction
Proximity and interaction:Horizontal informal
groups are prime examples of this.
Similarity: People may join informal groups because
they are attracted to other people who are similar to
themselves.
Several persons with the same attitudes or beliefs may
join one group. Other factors or similarity can be per-
sonality, race, sex, economic position, age, educational
background
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FORMAL AND INFORMAL
ORGANIZATION(continued)
10
Why informal groups exist?
They maintain the social and cultural values of the
group members.
They provide group members the opportunity for
status fulfillment and social interaction
They provide information for their members
They influence the work environment
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FORMAL AND INFORMAL
ORGANIZATION(continued)
11
The Impact of Informal Organization on the For-
mal Organization
The Negative Impacts:
Resistance to change
Conflict
Rumor
Pressure to conform
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FORMAL AND INFORMAL
ORGANIZATION(continued)
12
The Positive Impacts
Makes the total system effective
Provides support to management
Provides a useful communication channel:
Encourages better management
Provides stability in the work environment
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DEPARTMENTALIZATION
13
What is departmentalization?
The process of combining jobs into groups is termed departmental-
ization.
A manager must have a basis, or rationale, for combining jobs.
Bases of departmentalization
[Link] Departmentation:
A business firm includes such functions as production marketing, fi-
nance, accounting, and personnel.
[Link] (Geographic) Departmentation:
All activities in a geographic area are assigned to a particular man-
ager.
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DEPARTMENTALIZA-
14
TION
A business firm that is dispersed graphically often
will use territory as s departmentalization basis.
C. Product Departmentation:
Activities and personnel are grouped on the basis of
product.
As a firm grows, coordinating its various functional
departments become more difficult, and product de-
partmentation can ease coordination problems
The need for coordinating production, engineering,
sales, and service cannot be overestimated.
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DEPARTMENTALIZATION
15
Each division also must have accountants, lawyers, engineers,
market researchers, and scientists assigned to it .
Therefore, the product based organization runs the danger of
duplication of effort among its divisions.
[Link] Departmentation:
Grouping activities so that reflect a primary interest in cus-
tomers is common in a variety of enterprises.
[Link] departmentalization:
They combine their activities by combining different bases.
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DEPARTMENTALIZATION
16
Example: at the upper levels of management, the vice presidents
reporting to the president may represent different product
groups. At the level directly below the vice presidents, the man-
agers may be part of a particular function. At the next level in
the organization, there may be a number of different technical
classifications.
[Link] organizational:
The essence of matrix organization normally is combining of
functional and project or product patterns of departmentation in
the same engineering department, there are functional managers
in chare of engineering functions and an overlay of project man-
agers responsible for the end product.
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Span of Control (Span of Manage-
17 ment)
The span of control or span of management is concerned with
the number of subordinates each manager should have to direct.
There is no correct number for the span of control.
The more complex a subordinate’s job, the fewer should be
that manager’s number of subordinates, the greater the number
of subordinates that can be effectively directed and controlled.
[Link] how many subordinates should any one manager
have?
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Span of Control (Span of Man-
agement)
18
Narrow span of management-refers to the fact that a
few subordinates reporting to superior or being super-
vised by a superior.
Characteristics
1. Tall organizational structure and many levels of
management
2. More communication between subordinate and
superior
3. More trained personnel and centralized authority.
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Span of Control (Span of Man-
agement)
19
Wide span of management-refers to the fact that many sub-
ordinates reporting to a superior or being supervised by a
superior.
Characteristics
1. Short organizational structure and few levels of manage-
ment.
2. Less communication between subordinates and superior
because superiors do not have time to deal ideas with each
subordinate.
3. Less trained managerial personnel and decentralized au-
thority
4. The development of clear policies, rules……..etc.
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Span of Control (Span of Man-
agement)
20
FACTORS AFFECTING /DETERMINING THE SPAN OF MANAGE-
MENT
The ability of the manager
The ability of the workers
The nature of the work
Well defined Authority and responsibility
Geographical location
Sophisticated information and control system
Economic considerations: Companies prefer wide span to re-
duce costs (salaries of managers)
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Authority and power
21
Authority is the right to command resources in an
organization.
Types of authority:
A. Line authority
Defines the relationship between superior and sub-
ordinate.
It is a direct supervisory relationship.
Line authority flows downward in an organization
directly form superior to subordinate.
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Authority and power
22
[Link] authority:
It is advisory in nature.
Managers whose role is to provide advice or tech-
nical assistance are grated advisory authority.
Advisory authority does not provide any basis for
direct control over the subordinates or activates of
other departments with whom they consult
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Authority and power
23
[Link] authority:
It is authority delegated to an individual or depart-
ment are specific activities undertaken by person-
nel in other departments.
Staff departments may be given functional authority
to control their systems’ procedures in other de-
partments.
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Authority and Power
24
Sources of power:
Legitimate power/position power:
Refers to the power a leader possesses as a result of occupying a
particular position or role in the organization
Reward Power:
Refers to the leader's capacity to give or withhold rewards for
followers.
Coercive Power:
Coercive power is the ability to coerce or punish the influences/
followers when they do not engage in desired behaviors.
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Authority and Power
25
Expert Power:
Refers to power that a leader possesses as a result of
his or her knowledge and expertise regarding the
tasks to be performed by subordinates.
Referent Power / Charismatic Power:
Power that results from being admired, personally
identified with or liked by others.
Example: Great Athlete, a Great Football Player
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Authority and Power
26
Authority Power
It is positional: it will be there It is personal-it exists because
when the incumbent leaves. of the person.
Narrower – it is one type of Broader
power
It changes with changes in posi- Some types of power do not
tion. change (Expert, referent) but
some change legitimate, reward,
coercive.
Authority is delegated to an in- Not all power types can be del-
dividual egated (Expert and referent).
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Delegation, centeralization and decenteral-
ization
27
Delegation of Authority:
Delegation is a concept describing the passing of
formal authority to another person.
Superiors delegate, or pass authority down, to sub-
ordinates in order to facilitate work being accom-
plished.
Delegation may become necessary when managers
are absent from their jobs or just may be the phi-
losophy of the manager in order to develop subor-
dinates.
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Delegation, centeralization and decenteral-
ization
28
Procedures of delegation:
Step1:Assignment of tasks:
Specific tasks or duties that are to be undertaken are
identified by the manager for assignment to the sub-
ordinate.
The subordinate is then approached with the as-
signment (tasks).
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Delegation, centeralization and decenteral-
ization
29
Step2:Delegation of authority:
In order for the subordinate to complete the duties
or tasks, the authority necessary to do them should
be delegated by the manager to the subordinate.
A guideline for authority is that it should be ade-
quate to complete the task- no more and no less.
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Delegation, centeralization and decenteral-
ization
30
Step3:Acceptance of Responsibility: Responsibility to
carry out one’s assigned duties to the best of one’s ability.
The employee is the receiver of the assigned duties and the
delegated authority; these confer responsibility as well.
Step4: Creation of accountability:
Accountability is having to answer to someone for your ac-
tions.
It means taking the consequences- either credit or blame .
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Delegation, centeralization and decenteral-
ization
31
Centralization vs. Decentralization
The terms centralization and decentralization refer to a
philosophy of organization and management that focuses
on either the selective concentration (centralization) or
the dispersal (decentralization) of authority within an or-
ganization structure.
Guide lines to follow in determining the degrees of de-
centralized
The greater the number of decisions made at the lower lev-
els of management, the more the company is decentral-
ized.
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Delegation, centeralization and decenteral-
ization
32
The more important the decisions made at lower levels,
the greater the decentralization.
The more flexible the interpretation of company policy at
the lower levels, the greater the degree of decentraliza-
tion.
The more widely dispersed the operations of the company
geographically, the greater the degree of decentralization.
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Delegation, centeralization and decenteral-
ization
33
The less a subordinate has to refer to his or
her manager prior to a decision, the greater the
decentralization.
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